Coinbase Takes A $240 Million Hit In Signature Bank Collapse

Coinbase, the prominent digital currency exchange, owns $240 million of corporate funds in the now-defunct Signature Bank. The exchange is now reassuring customers that it is working to recover all of the funds.

The official Twitter account of the exchange revealed the lost amount through a tweet:

Despite the turbulence we have seen in the traditional banking sector recently, Coinbase continues to operate as usual. At Coinbase, all client funds continue to be safe and accessible including USDC conversions which will resume on Monday.

Coinbase Continues Normal Business Operations

Coinbase posted a tweet on March 13th stating that it will continue to operate normally. The exchange also confirmed that customer phones are secure and functional and can still process USDC conversions.

About Signature Bank

Signature Bank, a financial institution based in New York, operated as a comprehensive commercial bank. In addition, the bank possesses a broad presence of over 40 private client offices throughout New York. Moreover, It had a significant real estate portfolio and had recently ventured into safeguarding cryptocurrency deposits.

The regulators decided to close down Signature Bank last Sunday. The purpose of the bank closure is an effort to mitigate any possible risks that may harm its clients, including Coinbase. Furthermore, The Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), and the Treasury issued a joint statement declaring a systemic risk exception for Signature Bank, New York. 

The US Treasury Department and other banking regulators jointly stated that Signature Bank depositors receive complete compensation, and the taxpayers will not bear the financial burden.

Related Reading | Coinbase Launches Base: A Massive Confidence Vote For Ethereum

Along With Coinbase, Paxos, And Celsius Suffered A Loss

Paxos and Celsius have confirmed their financial losses in the recent collapse of Signature Bank. These companies may seek the assistance of the Federal Deposit Insurance Corporation (FDIC) to retrieve their lost funds.

Paxos and Celsius utilized their official Twitter accounts to announce the magnitude of their loss around the same time as Coinbase.

Paxos reported that they held $250 million in Signature Bank. Furthermore, they anticipate that FDIC will reimburse the majority of the amount. Paxos reiterated that  U.S. dollars back all funds deposited by customers on a 1:1 basis. Therefore the funds are redeemable at any time.

In contrast, Celsius did not disclose the amount lost in the shutdown. Moreover, the company acknowledged the situation and reassured its users by citing the FDIC document regarding the potential recovery.

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